In today’s EdTech Startups Japan Edition we take a look at three startups that are based in Japan, two of which founded by immigrant entrepreneurs from the US.

Translation platform Gengo surpassed 200 million translated words, Eigooo wants to teach English via text chat to shy students and Mana.bo wants to disrupt the $10 billion Japanese cram school industry.

According to an article by Mariko Katsumura on Reuters, more and more companies in Japan require new hire to have a “business English users” level. In addition Japanese white collar workers with a fear of losing their jobs in a down economy are taking English lessons themselves, either in language schools but increasingly via DVD and e-learning offers.

The first big push came from the Japanese online retailer Rakuten in 2010 with the decision to make English the official language of the company. Fast Retailing is planning the same for 2012 and is going to test its employees for English proficiency.

Another factor are outsourcing plans of big companies like chip maker Elpida Memory and mobile phone and computer parts maker Murata Manufacturing Co. Reasons for this are the high Yen and the aim to build revenue pillars outside of Japan by acquiring companies.

All this leads to a dramatic increase in the need to speak proper English. The problem is that Japan is known for its poor English speaking abilities though it is taught over six years in middle and high school. In the TOEFL iBT Japan ranked 27th of 30 amongst the Asian countries in 2010. Another survey found that only 9% of the white collar workers claim to be able to communicate in English.

As a result, the Japanese foreign language education market grew 1.6% to $9.8 billion from in 2010 and is expected to grow another 1.8% this year. Gaba, an English language school say that the average monthly spending of its students is about 50,000 Yen or $654. With an allowance of usually 36,500 Yen in average this means that most students pay about $180 out of their own pocket each month. In the e-learning space Rosetta Stone Japan more than tripled its revenues in 2010.

“This is just the start of Japan’s real globalisation. Everyone is feeling that they’ll see a no-English-no-job situation,” Gaba’s president Kenji Kamiyama told Reuters in a recent interview.